Daily Archives: March 31, 2009

Carola Hoyos

On Energy Source:

BHP stalks Rio Tinto: That old chesnut


Santander sells Cepsa stake to Abu Dhabi fund IPIC (Reuters)

Grumbles about ineffective government stimuli for the green economy came from both sides of the Atlantic. The Guardian got its hands on a report that concludes Britain’s economic rescue package contains “negligible” spending on green measures. The report compares the £120m earmarked for the green economy with the £775m worth of bonuses are paid to staff at the Royal Bank of Scotland. Meanwhile, the New Yorker makes intelligent arguments against the principles that green job creation helps to cut unemployment and hybrids cars improve our climate dilemma. Instead, the recession will prove the biggest help to our adapting to climate change.

But even cap-and-trade is flawed as its suffers from one long chain of unintended consequences, Fast Company writes, detailing a Greenpeace a report concluding that carbon credits for forest preservation would crash the price of carbon by as much as 75 per cent.

The Wall Street Journal has an interview with Igor Sechin, Russia’s energy czar, who believes oil is Russia’s “God-given good”. But the most interesting thing he says is well within the body of the story: “It would be irresponsible for Russia to join Opec because we can’t directly regulate the activity of our companies,” as nearly all are privately owned. His assertion of the Kremlin’s light touch when it comes to energy may not be entirely believable, but at least this should put to rest the perennial speculation that the world largest oil producer has any ambition to join the cartel. One can almost hear Riyadh sigh with relief.

Another reason Russia is in no hurry to voluntarily reduce its oil production appeared in the Telegraph , which wrote about the IMF’s dire predictions for Russia’s economy.

And finally, if you are a real oil nerd, head to Rigzone for all you ever wanted to know about the state of the world’s deepwater and ultra-deepwater drilling projects.

William MacNamara

The Rio Tinto rumour mill is buzzing with the idea that BHP Billiton could yet again be interested in buying part or all of Rio Tinto, following a Sunday Telegraph report and a Friday  note from respected mining analyst Michael Rawlinson.

Revived speculation about a BHP-Rio megamerger follows from a wider controversy about Rio’s agreed deal with Aluminum Corp of China (Chinalco), which would see Rio selling stakes in top-tier mines and smelters to Chinalco, plus an exclusive chunk of convertible bonds, in return for almost $20bn that Rio would use to pay off crippling debts. Some powerful UK and Australian investors remain opposed to the deal, and Australian regulators are making signs that they might be more opposed to China’s creeping influence in the Australian resources sector than first thought.

Energy news from elsewhere:

- Obama energy ‘taxes’ have silver lining, analyst says (Platts)

- US government wants court to rehear oil royalty dispute (Reuters)

- China Coal Group says to invest $15bn in Xinjiang (Reuters)

Energy news from the FT:

- Russian group buys €1.4bn stake in Mol
European Commission concerned deal may undermine energy policy

- China’s Minmetals makes fresh proposal for Oz Minerals
New proposal excludes mine at centre of Canberra’s objections

- Renewables desperate to feel breath of funds
Ethanol producers hit especially hard

- Lex: Mol/Surgut

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